Daniel O’Day, Chairman & CEO, Gilead Sciences, recently sent an open letter to the American Public, indicating why its U.S. Patented drug Remdesivir to treat the coronavirus will be a company $$ bonanza with its new pricing.
Because of the way the U.S. system is set up and the discounts that government healthcare programs expect, the price for U.S. private insurance companies, will be $520 per vial, O’Day explained.
The drug requires six vials, so the total price is $3,120 per person. He said that governments will get a “special” price break at $2,340.
To ensure broad and equitable access at a time of urgent global need, we have set a price for governments of developed countries of $390 per vial. Based on current treatment patterns, the vast majority of patients are expected to receive a 5-day treatment course using 6 vials of remdesivir, which equates to $2,340 per patient.
O’Day said we are lucky, because his company should have charged even more:
Taking the example of the United States, earlier hospital discharge would result in hospital savings of approximately $12,000 per patient. Even just considering these immediate savings to the healthcare system alone, we can see the potential value that remdesivir provides.
In the weird world of drug pricing, are patients here really getting a big break – a $12,000 value for “just” $3,100, according to Gilead? But there’s more to this story, and it isn’t pretty.
In the developing world, where healthcare resources, infrastructure and economics are so different, we have entered into agreements with generic manufacturers to deliver treatment at a substantially lower cost. These alternative solutions are designed to ensure that all countries in the world can provide access to treatment.
The deal is we pay $3,100 in the U.S., including Medicare patients, and other countries can sell generic versions for a fraction of that price.
If administered in the hospital – a logical development – billing could approach the average markup there of 497% the usual price, or about $15,000. That would be tragic news for those without drug insurance.
For Medicare – the only drug plan if older than 65 – the treatment will eat up most of the prescription drug savings for seniors that were included in Obamacare. Once seniors spend a total of insurance and co-pays of $4,020, they are in the the coverage gap, and are charged no less than 25% of drug costs, even if their prescriptions are many tens of thousands of dollars a month.
Meanwhile, in the world of unfair healthcare, Indian drug makers Cipla and Hetero Labs are launching their own generic versions of COVID-19 treatment Remdesivir after an agreement with Gilead Sciences.
Cipla has priced its drug at less than Rs 5,000 ($66) per vial, and Hetero will charge Rs 5,400 ($71) per vial for its copy. That means the drugs are priced there about $400 per treatment course.
You can bet that the generic coronavirus drugs from India will quickly travel here through the black market, but they won’t have to secretly import the generic into China, arguably the most advanced economy and technically-superior nation in the world.
China will be using the brand name, since China also patented Remdesivir, and will only pay a licensing fee to Gilead. Price for the drug in China will be an estimated $200 for the entire treatment course, compared to our $3,100.
This deal that should be examined by our government. Gilead agreed that China could patent the drug for exclusive sale in China, excluding Gilead from selling there, and vice-versa – China can’t sell in the rest of the world, giving Gilead that monopoly (17 years).
Meanwhile, Gilead promises to give additional “poor” countries, like India, the right to produce generics, and sell them for a fraction of what we pay here.
Most Americans recognize that they are being ripped off by the pricing of prescription drugs and often pay huge amounts for drugs here (Xarelto – $7 in India, $500+ in U.S.), but the drug company lobbyists control our lawmakers.
One of the most despicable spokespersons – in my opinion – for the legal drug cartel is Sally Pipes, CEO and President of Pacific Research Institute (PRI), who defends Gilead without a blink of regret:
Some Democratic lawmakers and policy experts attacked remdesivir’s price as soon as it was announced. They claim that Gilead could sell the drug for as little as $1 per dose – and that the higher price reflects nothing more than the pharmaceutical company’s desire to capitalize on the crisis.
That critique makes little sense. Even some of the drug industry’s most prominent critics have acknowledged that remdesivir’s price is fair, as the value it delivers could end up being a lot higher than its price tag. Further, selling innovative drugs for pennies would starve companies of the funding they need to develop the next generation of cures.
Despite the reality that other nations develop drugs, sell them inexpensively, somehow Pipes believes:
If the government set drug prices or seized patents to give away drugs for free – two policies that have recently gained ground among Democrats – drug development would grind to a halt. No investor would fund such risky research if the chances of recouping their outlays were null. Without adequate funding, it would take even longer to develop a successful new drug than it does today.
Conclusion: if you can’t make a few billion dollars profit, why make the effort, we’re a profit-industry, not national treasures or institutions. PRI is a brainchild of the Koch folks and other so-called “libertarian groups” who want to privatize everything in America and the world, and leave the government with no public functions, except protecting Wall Street, international corporations and the rich elites’ mansions and yachts.
The other side of the pricing controversy is more compelling.
AIDS Healthcare Foundation (AHF) has demanded that remdesivir be priced at no more than one U.S. dollar per dose, according to Businesswire.
AHF further demanded that Gilead Sciences also disclose all its public research and development costs and all public investments in connection with the development of remdesivir.
AHF’s dollar per dose demand is based on a University of Liverpool research study, “Minimum costs to manufacture new treatments for COVID-19” that allows for recovery of the cost of manufacturing plus a reasonable profit.
“The U.S. taxpayer paid for the research for this drug. Medicaid and Medicare are very likely going to pay for the prescriptions for this drug in the United States,” explained AHF President Michael Weinstein.
This massive expenditure of public resources requires full disclosure of how extensive the taxpayer is subsidizing drug companies.
We further demand that Gilead not enforce or claim any exclusive rights on patents for remdesivir, that it make available to the public all data, samples and information for the generic production of remdesivir, and that it improve transparency to show its manufacturing capacity and existing supply to allow for proper governance of the allocation of the drug according to medical needs, added Weinstein.
“Given Gilead’s abysmal record of making lifesaving treatments available for HIV and Hepatitis C, also financed at taxpayer expense, this pandemic profiteering enterprise can’t be trusted to look out for the public’s interest,” he explained.
And then there are cats, and this subject becomes more far-ranging:
When Robin Kintz’s two kittens, Fiona and Henry, contracted a fatal cat disease last year, she began hearing of a black-market drug from China. The use of the Gilead drug, known as GS-441524, is based on legitimate research from UC Davis, but the ways to get it seemed much less so, according to The Atlantic.
. “It was, ‘If you want to save your cat, send me thousands of dollars, and I’ll DHL you some unmarked vials,’” she says. And she did. Kintz transferred the thousands of dollars, got the unmarked vials from China, and then injected the clear liquid into her dying cats every day for months.
…The first remarkable thing, given the nature of the transaction, is that Kintz says the vials actually worked. Henry lived for almost another year, and Fiona made a full recovery. She’s still scampering around today, fluffy and alive—a miracle considering that vets had long thought her disease, feline infectious peritonitis, to be incurable and 100 percent fatal
The second remarkable thing is that GS-441524 is almost identical to a much buzzed-about human drug: remdesivir, the antiviral currently our best hope for treating COVID-19, the disease caused by the novel coronavirus.
Black-market GS-441524 is expensive. A 12-week treatment for cats can cost upwards of $10,000, depending on the brand, and weight of the cat. Plus, there is no legal way to buy GS-441524 as medicine—not for cats, not for humans.